The new stock brokers’ selection process that started three and half years ago is drawing to a close soon.
The capital market regulator Securities Board of Nepal (Sebon) has conducted on the spot inspection of the establishment of two of the aspirant brokerage firms that have obtained Letter of Intent (LoI) from the regulator earlier. Of the eleven brokerage firms that have obtained the LoI, the representatives of Sebon visited the premises of Dakshinkali Investment and Securities and Kohinoor Investment and Securities Company today to check the infrastructure.
“Sebon officials have inspected our premises as we have completed the set up of required infrastructure as per the regulation,” said Bharat Ranabhat, director of Kohinoor Investment and Securities.
“If they find the setting satisfactory then we will get the license,” he added.
The process that started in November 2007 was interrupted by Commission for Investigation of Abuse of Authority (CIAA). In February 2008, the anti-graft watchdog halted the process, questioning the transparency the day before recommendation test was to take place. Since then, the process could not be resumed due to this very reason.
Finally, after much insistence from all sides the test was conducted in October last year. Of the 134 examinees that appeared in the exam, Nepse selected the highest scoring 34 candidates and recommended their names to Sebon for the final selection on November 2010. The aspirant brokers were required to submit the documents such as feasibility study report, tax clearance certificate, and financial statement of the company since the inception among others.
Once the regulator is satisfied that all the requirements were fulfiled, it will grant LoI as per the provision of Securities Businessperson Regulation, 2064. According to the regulation, the company has to prepare necessary office infrastructure including human resources within six months after the date of receiving notice from Sebon.
Back in 2007, Nepse had decided to add 27 brokers to take the total number of brokers to 50. At that time when the secondary market was enjoying its boom, the limited number of brokers was not sufficient to cater to all the investors.
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